Decena Corporation Manufactures One Product

question 72

Multiple Choice

Decena Corporation manufactures one product. It does not maintain any beginning or ending Work in Process inventories. The company uses a standard cost system in which inventories are recorded at their standard costs. Information concerning the direct labor standards for the company's only product is as follows:
During the year, the company assigned direct labor costs to work in process. The direct labor workers (who were paid in cash) worked 15,830 hours at an average cost of $18.50 per hour. The company calculated the following direct labor variances for the year:
Assume that all transactions are recorded on the below worksheet, which is similar to the worksheet shown in your text except that it has been divided into two parts so that it fits on one page. The beginning balances in each of the accounts have been given. PP&E (net) stands for Property, Plant, and Equipment net of depreciation.

-When recording the direct labor costs,the Work in Process inventory account will increase (decrease) by:

• A) ($292,855)
• B) $286,740
• C) $292,855
• D) ($286,740)

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Definitions:

Natural Rate

The natural rate often refers to the natural rate of unemployment, which is the level of unemployment consistent with sustainable economic growth, without accelerating inflation.

Unemployment Insurance

A state initiative offering short-term monetary support to individuals who are out of work due to circumstances beyond their control.

Temporary-Help Industry

Refers to a sector comprising companies that provide employees to other businesses on a temporary basis. These firms often specialize in supplying temporary workers for office administration, industrial labor, or professional roles.

Natural Rate

The natural rate often refers to the natural rate of unemployment, which is the level of unemployment expected in an economy without short-term fluctuations.